The company provided the following inventory data for 20X1: Jan 1 Beginning inventory 1,000 unit
Posted: Thu Apr 28, 2022 10:43 am
The company provided the following inventory data for 20X1:
Jan
1
Beginning
inventory
1,000 units @ $4.00
May 18 Cash
Purchase
2,000
units @ $4.50
Oct
5
Credit
Purchase
1,000 units @$4.80
Nov 24
Credit Sales
3,000
units
Dec
1
Credit
Purchase
1,000 units
@$5.00
The company’s reporting date is December 31.
(4) In 20X2, the company found an overstatement of $2,000 for
20X1’s ending inventory. The income tax rate is 30%.
Prepare journal entries to correct this error.
Jan
1
Beginning
inventory
1,000 units @ $4.00
May 18 Cash
Purchase
2,000
units @ $4.50
Oct
5
Credit
Purchase
1,000 units @$4.80
Nov 24
Credit Sales
3,000
units
Dec
1
Credit
Purchase
1,000 units
@$5.00
The company’s reporting date is December 31.
(4) In 20X2, the company found an overstatement of $2,000 for
20X1’s ending inventory. The income tax rate is 30%.
Prepare journal entries to correct this error.